Corporate Securities Info

Ban on corporate contributions

/ 05:02 AM February 19, 2019

The biggest and most expensive circus in the Philippines this year, which is more popularly known as election campaign, has begun.

From Feb. 12 to May 11, senatorial candidates and party-list groups can officially engage in campaign activities to solicit votes from the public. For local candidates, including congressional districts, the authorized campaign period is from March 29 to May 11.


The day before the May 13 polls, all hustings are supposed to end to reduce political tension.

As in the past, the campaign is expected to be rough at the local level where partisan feelings tend to go wild because of the physical proximity of the competing candidates and their supporters.


For environmental groups, the coming days would be a nightmare. They expect public areas to be littered with billboards, tarpaulins and other campaign materials that are harmful to the environment.

The environmentalists’ lament, however, would be the government economists’ blessing. Collectively, the candidates are expected to spend hundreds of millions of pesos to achieve their aspirations. Their spending would contribute substantially to the country’s gross domestic product this year.

Unless the candidates have deep pockets or are backed by wealthy interests, they may have to seek financial assistance from third parties to help defray their expenses.

For obvious reasons, the candidates’ “wish list” for campaign contributions would include companies with healthy profit records or are doing well in their areas of political governance.

Companies that may be inclined to extend funding assistance to some candidates, whether voluntary or forced by circumstances, have to reckon with the Corporation Code provision prohibiting corporations, domestic or foreign, from giving “… donations in aid of any political party or candidate or for purposes of partisan political activity.”

The ban is aimed at preventing companies from enjoying “extraordinary” ties with or influence over winning candidates they helped financially. The elected officials’ sense of gratitude may affect their judgment on matters of public concern that involve their benefactor.

The Omnibus Election Code later made this prohibition on corporate contributions apply specifically to, among others: public or private financial institutions; contractors or sub-contractors of government goods or services; grantees of government franchises; grantees of government loans of more than P100,000; and educational institutions that have received government fund grants of more than P100,000.


Noticeably, since the Corporation Code was enacted in 1980, and even after the Omnibus Election Code took effect in 1985, no company has been reported to have been accused of or convicted for violation of the corporate contribution ban.

This may be due to either of two things: All Philippine-registered corporations have taken to heart the prohibition and have scrupulously complied with it. Or, contributions are being made, but done without any record that may put the hounds of the Commission on Elections on their trail.

Knowing the Filipino businessmen’s trait of hedging their bets during elections to make sure they’re in the good graces of the people in power, both national and local, full compliance with the ban on contributions by corporations is a big question mark.

For the reason earlier cited, it’s more likely that contributions are being done under the table or through the use of false pretenses, with the Comelec clueless about it or does not have the time and manpower to conduct the proper investigation.

Leave it to the corporate lawyers to devise ways and means to go around the prohibition on corporate contributions to make sure their clients are on the “right” side of the fence after the elections.

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